LAWSUIT UPDATE: OOIDA v. C. R. England

OOIDA’s class action lawsuit against a Salt-Lake City motor carrier is finally moving toward resolution. The case is still in the damages phase, and the federal judge in Utah – whose job it is to determine how much will be awarded to the class – is pushing for a mid-2011 wrap up.

BACKGROUND: The class action lawsuit was first filed in 2002 and went to trial in federal court in 2006. The takeaway for OOIDA and trucker plaintiffs was a benchmark truth-in-leasing victory for truckers.

A federal judge in Utah ruled that the lease agreement C.R. England used with its owner-operators between the years 1998 through the summer of 2002 violated federal regulations in several respects, including by failing to specify markups on charge-back items and by forcing owner-operators to purchase administrative services from the carrier.

U.S. District Judge Ted Stewart also held that the C.R. England’s lease violated the escrow provisions of the leasing regulations, and specifically found that the motor carrier had improperly managed thousands of truckers’ escrow accounts. The court ruled that the motor carrier must provide an accounting of what happened to those funds.

In October 2008, Judge Stewart held that individual class members would be entitled to restitution, along with “payment of reasonable interest,” if they had positive escrow balances, after consideration of any allowed set-offs.

Following the decision in Salt Lake City, Stewart referred the case to U.S. Magistrate Judge David Nuffer to oversee the disposition of individual class members’ escrow claims.

CURRENT STATUS: OOIDA’s Counsel David A. Cohen of The Cullen Law Firm reported last week that both sides met with Judge David Nuffer on Dec. 17 to discuss moving forward with the accounting and specifically the adjudication of C.R. England’s setoffs against individual class members.

“The judge stated that he is determined to move this case forward in an efficient and expeditious manner,” said Cohen. “In that regard, the parties have agreed to a joint adjudication plan that will group similar claims together – such as contested refurbishment setoffs, contested maintenance charges, etc. – so that the case may be concluded without a thousand mini-trials.”

Judge Nuffer has set aside seven days (Feb. 10-11; March 24, May 4-6 and May 25) for hearings on contested setoff claims. After each hearing the judge will make a ruling on the legitimacy of the set-off in question and the ruling will be applied across the class.

“The plan is to maximize efficiency by having the court make a series of interim rulings that will have the effect of determining damages/restitution for individual class members,” said Cohen. “For example, if the court rules, as we believe it should, that the ‘termination administrative fee’ ($500) was not a legitimate charge, then the court’s ruling will be applied to all individual class members – obviating the need to have a class member-by-class member adjudication.”

OOIDA does not believe the fee was legitimate because the $500 charge had no relation to C.R. England’s actual costs.

Cohen said the goal is to have all setoffs adjudicated by this summer. Once the setoffs are disposed of, OOIDA will ask that judgment be entered in favor of individual class members for the unreturned escrow amounts plus any interest that is due to the driver.

“Given the fact that the majority of class members signed a lease containing an 18 percent interest clause, the damages/restitution awarded will be quite substantial,” he said.

Cohen said as the process moves forward, OOIDA will have a better idea of the total damages to be awarded to the class.